Invest Sri Lanka 2018: Full Speech by PM Ranil Wickremesinghe

Invest Sri Lanka 2018 forum in Singapore:

 

PM spells out efforts to woo investments, spruce up infrastructure (headline)

 

• Points out key initiatives taken to stabilise and re-orient Sri Lanka’s economy
• Announces plans to launch the Colombo International Financial City gallery by mid this year
• By mid-2018, time taken to register a new business will reduce from 6 days to just 1 day
• Finding land and registering property will be halved from 51 days to 26 days and procedures reduced from 9 steps to 2 steps

 

Sri Lankan Prime Minister Ranil Wickremesinghe last week expounded on several plans by the government to spruce up domestic infrastructure and re-orient Sri Lanka’s economy to an outward looking one, driven by private enterprises, exports, and foreign direct investments.

Presenting the island to an audience of high profile Singaporean businessmen and fund managers at the Invest Sri Lanka 2018 forum, the Premier outlined that Sri Lanka is currently setting up three large industrial zones including one in partnership with a private investor from Thailand in addition to the new Logistics and Industrial Zones in Hambantota being developed with Chinese investment.

“We also expect to develop tourist zones and domestic airports across the country, to facilitate the booming tourism industry.  The major tourist resorts which are available to private developers will each be over 500 acres in extent, larger than many tourist island resorts in the region,” Prime Minister Wickremesinghe told the Forum held at the Four Seasons Hotel, in Singapore.

Whilst noting the government is developing Sri Lanka’s three large ports and two international airports and improving domestic connectivity and infrastructure, he said a key initiative on this front will be the highway connecting Hambantota, Colombo and Kandy in the centre of the country ‘opening up new corridors of economic dynamism’.

Calling on the Singaporeans to invest in Sri Lanka now to benefit from the early mover advantage, the Prime Minister reiterated that Sri Lanka is committed to forging ahead with the reform agenda.

“We are undertaking many policy initiatives to incentivize direct private investment both foreign and local. In 2018, you will see the results of our commitment to improving the Ease of Doing Business.

“By mid-2018, the time taken to register a new business will reduce from 6 days to just 1 day.

Finding land and registering property will be halved from 51 days to 26 days, and the procedures reduced from 9 steps to 2 steps,” the Prime Minister highlighted.

Speaking further, he pointed out Sri Lanka is introducing an ‘Electronic Single Window’ that will link dozens of state agencies dealing with international trade through a few clicks. Through the new Colombo International Financial City, the present Port City project, Sri Lanka is creating a unique business climate that is globally-competitive, he said.

“This new city will function as a special economic zone and have a conducive and transparent regulatory system. It will provide an environment for your companies like no other in this region.

The enabling legislation is now in the preparatory stage.  We plan to launch the gallery mid this year –should you visit,” Wickremesinghe said.

Complementing these efforts, the Prime Minister said the government is undertaking comprehensive trade policy reforms by removing protectionist para-tariffs to leverage on its strategic location and expand market access.

“Therefore we are expanding our trade and investment relationships with a diverse set of countries, such as the US, EU, India, China, Singapore, Japan, Malaysia, Thailand, and Indonesia,” the Prime Minister noted.

In conclusion the Premier vowed to make Sri Lanka a strong, stable and resilient economy, and an attractive place to do business through liberalization efforts coupled with other initiatives like the National Export Strategy, the Tourism Strategy, the Innovation and Entrepreneurship Strategy and the Digital Economy Strategy.

 

Following is the text of the full Speech Made Sri Lankan Prime Minister Ranil Wickremesinghe at the at The Invest Sri Lanka Forum held at the Four Seasons Hotel in Singapore on 2nd March 2018.

Your Excellency S Iswaran – Minister for Trade and Industry in Singapore, Your Excellency Mr Nimal Weeraratne – Sri Lanka High Commissioner in Singapore, Your Excellency Mr Chandra Das – Singapore High Commissioner to Sri Lanka,Dr Indrajit Coomaraswamy – Governor of the Central Bank of Sri Lanka, Mr Ray Abeywardena – Chairman of the Colombo Stock Exchange, Mr Vajira Wijegunawardena – Director General of the Securities and Exchange Commission of Sri Lanka, Mr Angelo Perera – President of the Singapore-Sri Lanka Business Association

All Heads of Listed Companies of Sri Lanka

Distinguished Delegates and Friends,

It is a great pleasure to be here.  I want to thank the Colombo Stock Exchange, Securities and Exchange Commission of Sri Lanka and the Singapore Sri Lanka Business Association for the invitation extended to give the Key Note Address at this Investor Forum in Singapore.

Sri Lanka is on the path of becoming an attractive place for business in South Asia, one of the fastest growing regions of the world.   Furthermore, the ongoing global economic power rebalancing is resulting in the Indian Ocean becoming a centre of economic gravity.  This in turn enables us to leverage on our strategic location to become a hub of the Indian Ocean by building on our good relations with the key economies.   We have accepted the concept of a ‘Free and Open Indo-Pacific Policy and Maritime Order’ proposed by Japan. We play a crucial role in India’s ‘Neighbourhood First’ policy. We are also an important linchpin in China’s Belt and Road Initiative, particularly the maritime route connecting East Asia with Africa.   Sri Lanka as an island is increasingly becoming a vital player in this region enabling us to punch above our weight. A lesson we have learnt from Singapore.  This also means that for you – in Singapore – Sri Lanka becomes a very advantageous hub to do business, to live, to invest in, to use as a springboard to South Asia and the Indian Ocean region, and as a link between South East Asia and South Asia.

According to the World Bank’s South Asia Economic Focus “advanced economies are recovering and are seeing faster growth that will likely increase the demand for South Asian products.  The region should seize this opportunity to diversify its exports and enhance its supply response”.  Sri Lanka is following a similar strategy.   Hence our Government has taken numerous initiatives to stabilise and re-orient the economy. We are moving from a growth model dependent on debt-fuelled public infrastructure spending, to an outward looking one driven by private enterprise, exports, and foreign direct investment. Across the government we are focusing on reforms that will catalyse growth and create better jobs for our people, so that we can become an upper middle-income economy with high social indicators.

We envision Sri Lanka becoming a knowledge-based, highly competitive economy at the hub of the Indian Ocean. To achieve this, we will need to move our manufacturing and services up the value chain. We need to increase export earnings to create a favorable balance of trade. This means that as a country, we must have better financing, cutting edge technology, and improved market access. Therefore our government knows that attracting foreign investment is a key priority.

We are undertaking many policy initiatives to incentivize direct private investment both foreign and local. In 2018, you will see the results of our commitment to improving the ease of doing business. By mid 2018, the time taken to register a new business will reduce from 6 days to just 1 day. Finding land and registering property will be halved from 51 days to 26 days, and the procedures reduced from 9 steps to 2 steps. We are introducing an ‘Electronic Single Window’ that will link dozens of state agencies dealing with international trade through a few clicks. Through the new Colombo International Financial City, the present Port City project, we are creating a unique business climate that is globally-competitive. This new city will function as a special economic zone and have a conducive and transparent regulatory system. It will provide an environment for your companies like no other in this region.  The enabling legislation is now in the preparatory stage.  We plan to launch the gallery mid this year – you should visit.

The government is complementing these efforts with comprehensive trade policy reforms. The recent budget removed protectionist para-tariffs on over 1,200 items, with the rest slated for removal in 2018 and 2019. We know we can leverage on our strategic location to expand market access. Therefore we are expanding our trade and investment relationships with a diverse set of countries, such as the US, EU, India, China, Singapore, Japan, Malaysia, Thailand, and Indonesia.

During your Prime Minister’s visit in January, our two countries signed a landmark Free Trade Agreement. This was the first trade agreement that Sri Lanka forged in over 10 years. It is also Sri Lanka’s first comprehensive FTA, which goes beyond goods to include services, investment, e-commerce, government procurement, telecommunications, financial services, and economic cooperation. To have done our first comprehensive agreement with Singapore – one of the most open and liberalized economies in the world having high-quality institutions – is an especially important milestone for our country. It signals our government’s commitment to ushering in an era of openness for Sri Lanka – an era of close trade integration that enables us to becoming a formidable economic hub in the Indian Ocean.

The Singapore-Sri Lanka FTA is part of a broader strategy of looking East to renew our trade relationships.   While we focus on growing and sustaining our traditional markets of the US and Europe, we have begun to diversify our markets towards Asia and focus on plugging into Asian supply chains. This FTA is our first agreement with a South East Asian country – and we envisage this as a first step towards closer integration with the Regional Comprehensive Economic Partnership Agreement.

We are close to concluding two more bilateral trade agreements –

(a) an Economic and Technology Cooperation Agreement with India deepening the existing FTA and

(b) a comprehensive FTA with China.

These agreements are an important part of the new ‘National Trade Policy’ launched last year, and are a linchpin in the ongoing trade policy reforms. They will add on to the advantage created by our access to the EU’s GSP+ facility. This means that through our preferential market access, any business located in Sri Lanka would be able to access nearly 3 billion people from Spain to China – we are probably one of the very few countries in the world that can claim this! This only adds on to our strategic geographical advantages – we are 1 hour from 5 fast-growing South Indian States, have quick access to the Bay of Bengal region, and only a few hours from South East Asia and the Middle East.

With our excellent strategic location, we are also attracting Belt and Road projects from China. We expect a lot of investor interest in the new Logistics and Industrial Zones near the southern port of Hambantota, which is being developed with Chinese investment.

Three other large industrial zones are being set up, including one in partnership with a private investor from Thailand. We also expect to develop tourist zones and domestic airports across the country, to facilitate the booming tourism industry.  The major tourist resorts which are available to private developers will each be over 500 acres in extent, larger than many tourist island resorts in the region. Our government is developing Sri Lanka’s three large ports and two international airports and improving domestic connectivity and infrastructure. A key initiative on this front will be a highway connecting Hambantota in the South, Colombo, and Kandy in the centre of the country, and this will open up new corridors of economic dynamism – A highly developed economic infrastructure system connecting two ports, two international airports, 3 major cities.

Finally – and probably most importantly for you – on the macroeconomic front:   When we took over the economy in 2015, we had a challenging task on our hands. National debt had been mismanaged, and fiscal and monetary policy lacked discipline. Since then, we have taken appropriate measures to build back our economy’s strength and resilience. We are very focused on fiscal consolidation, and the results are already visible – the tax to GDP ratio has improved, and ratings agencies are providing favourable outlooks. Next month, a new Inland Revenue Act will come into effect, providing a progressive, modern, and transparent income tax policy. The tax incentives regime is now firmly written into the law, and is based on investment allowances. The top rate of income tax is now lower than many countries in the region. Other revenue initiatives – VAT reforms, predictability in tax incentives, digitization of revenue administration – are all part of the fiscal reforms we have embarked on, guided by the on-going IMF programme. The Exchange Control Act has been replaced by a new Foreign Exchange Act.  The forecast for the “Sri Lanka Economy  2018” states amongst others that, Merchandise exports is anticipated to grow by 10.7%

On monetary policy, the Central Bank has moved towards a more competitive exchange rate and a proactive monetary policy stance, and is avoiding “stop-go” cycles leading to instability. The Central Bank is now being recognised for providing a lot more clarity and certainty to the business community. You will no doubt hear more about our economy from the Governor of Central Bank of Sri Lanka who will be speaking later on in the programme.

As I wrap up, let me reiterate that we are committed to forging ahead with our reform agenda. We will make Sri Lanka a strong, stable and resilient economy, and an attractive place to do business. The National Budget 2018 contained some of the strongest announcements of liberalization we have seen in years and we intend to implement them fully. We are coupling this with other initiatives like the National Export Strategy, the Tourism Strategy the Innovation and Entrepreneurship Strategy, and the Digital Economy Strategy.

We encourage you to come and invest in Sri Lanka now – as an early mover – and be a part of the new growth story playing out in the Indian Ocean!

Thank you.